7 Reasons why every business needs a bookkeeper

The two biggest reasons why every business needs a bookkeeper to manage their finances and prepare their documents for tax

Many business owners ask why they need a bookkeeper. And let’s face it, it’s not one of those investments that want to make you jump up and down with excitement.

But getting a bookkeeper must be one of your first priorities when you start a business.

And this is why:

1. You will know exactly how much money is coming into your business and how much money is going out.

This sounds pretty simple and straightforward because most business owners just look at their bank accounts and think that they know the answer to this question.

But do you really?

When you look at your bank balance, the amount you see will either make you jump with joy, or cause you to clutch your heart in shock. You will see more than you’ve expected or less than you thought you had. But you won’t really know where the money has gone or exactly where it came from.

Your bank statement is only a reflection of what goes in and out but it does not give you a breakdown of what is really going on in your business.

It doesn't reflect what part of your business is really making money or losing money. It doesn't show you what you spend on your expenses for the whole month, and you definitely won't know where all the money has gone just by looking at your bank entries.

2  You will know what you are spending your money on

Have you ever looked at your bank statement and you’ve got way less left than what you calculated in your head? First, your heat misses a beat, and then you get that sinking feeling in your stomach, trying to calculate in your head how much you've actually spent. But all you manage is to hit a complete blank.

Then you start thinking that those people working in the bank have dipped their hands in your account when you were not watching, only to find that you overspend. Even worse, you can’t remember what you spent it on.

Having a bookkeeper might not change your money habits but it will make you aware of how much money you are wasting.

3. You will become aware of how much of the business money you spent on your personal use

Many business owners use their business accounts for personal expenses. This is not the problem.

It becomes a problem when you swipe your business card for personal expenses at every opportunity and you keep no record of these transactions.

There are business owners who have more personal transactions on their business bank statements than business transactions. And they have no idea how much money is disappearing into the wind in this way.

A bookkeeper will create an account for drawings and then you will be able to see how much of the business money goes into your pocket for private use. 

And too often it is shocking and depressing to see how much money is wasted that could’ve gone back into the business.

4. You will see who owes the business money

Many South African business owners don’t have proper records of their customers. These records include the name and surname, address, contact numbers, and email addresses of their clients. This is just the basic information every business owner should have about all customers or clients.

Having that list will also help to see who owes you money because you'll be able to match payments and invoices with client names.

When you have a customer or client list you can keep proper records of who pays on time, who always pays late, and who doesn’t pay.

You will also be able to see how long has a client been owing you money. At the click of a button. 
If you don't have a client list, it will be one of the first things that your bookkeeper will put in place for you.

5. You will see if you’re making a profit or running at a loss.

It is every business owner’s dream to make consistent profits but without the right accounting system, you will not see those profits.

A bookkeeper will be able to compile profits and loss reports for you that will either paint a wonderful picture of a company doing good, or the picture will depress the hell out of you.

6. Your tax affairs will be in order

Show me one single person who loves to pay tax, and I will show you a person who clearly doesn’t have all their marbles in one place.

Let’s be honest, we hate paying taxes, especially in South Africa with the high levels of corruption in our government.

But taxes are one of those things that must be paid.

Having a bookkeeper will help you to get your books ready for tax submission.

The job of a bookkeeper is to prepare your books for tax. You will be able to submit your tax without any stress because everything will be in order.

That in itself will make it worth your while to get a bookkeeper.

7. You will save time and money

The latest accounting software has made bookkeeping easier, but it’s still advisable to get a bookkeeper to keep proper tabs on your business.

In the beginning, it might seem cheaper and easier to do your books, but do you really want to sit and try and balance your books after working in your business?

Are you able to record every transaction as it happens and allocate it to the right accounts?

Are you able to trace the money when you can’t reconcile an account?

These are but a few of the things we as bookkeepers do on a daily basis. What you’re paying is for more than just typing in amounts and receipts. You are paying for peace of mind, transparency, and financial information that you can access at the click of a button. You are paying a fee for an opportunity to see a clear picture of your business finances and that will help you to grow your business.

Bookkeepers prepare the documents that you are going to need when you want to borrow money from the bank or any other financial institution. We are able to create order in your business finances, so you don't have to wonder what the state of your business is.

If you are looking for someone to prepare your documents for funding, send me an email at profitsandbooks@gmail.com, or send me a WhatsApp message on 064 049 0308